Dear Members,
Many asked to put some outlook on metals as gold moved above $1265 level. This is what we mentioned on 21 May in our weekly newsletter about metals.
This week’s weekly newsletter from 22-26 May 2017:
GOLD/SILVER/BASE METALS
Last week gold acted positively but the rest of the metals traded negatively. Copper bounced back on late Thursday and Friday and gold held value very well. Let me give you very brief predictions without writing long explanations.
There is no doubt that weakness of Dollar and uncertainty in the White House is surely the key supportive factor for gold. I am sure that gold will able to help silver but not base metals because our view on base metals is very negative. Don’t buy base metals if gold moves higher on uncertainty. At this stage buying gold and selling base metals will be a great hedging and safe money making trade for metal investors.
If gold fails to take advantage of the current uncertainty and weakness in USD then surely gold may enter the worst historic bear cycle.
GOLD WON’T ENTER a BEAR MARKET AS LONG AS IT HOLDS $1195 ASTRO LEVEL. Once it starts trading below $1195 then it will achieve $775 very quickly. On the higher side once again remaining and closing above $1263 will surely be a positive and bullish sign for gold, which can push gold towards $1339 in the coming uncertain time. At this stage remain a spectator and take trades once it starts breaking on either side. Our medium and longer term view is still not very positive for gold but lets see what role this short term uncertain time cycle can play for gold.
Silver, copper, palladium, zinc, lead, and nickel will remain in a bearish trend so we are not recommending any buying in these base metals for the medium and longer term. These base metals will collapse with the market fall.
We are recommending selling base metals on any rise from Monday to Wednesday, and carry these short positions into next week. This week gold will hold value of $1238 and on the higher side watch $1265. Trading in and out with buying at lower levels from Monday to Wednesday may provide you profit.
Sell copper around $260, silver $17.35, and palladium $782. We are not recommending buying metal mining stocks. Stay long in DUST and JDST at this stage.
Important note: If gold fails to remain in the green from Monday to Wednesday, that could be the worst news for gold traders.
Thanks & God Bless
Mahendra Sharma